What is Effective Rent?

Effective rent is the true average rent over a lease term once incentives are counted: rent-free periods, fit-out contributions and stepped rents all reduce the headline figure the landlord quotes. A lease advertised at one rate with twelve months rent free over a five year term costs materially less per year than the headline suggests.

Negotiations, renewals and break decisions should always compare effective rent, not headline rent, alongside total cost of occupancy.